Accounting Norway finds the mass sports VAT rules to be unnecessarily complex. Unlike elite sports, which are conducted commercially, mass sports relies heavily on voluntary efforts. That is why we propose to simplify the rules on VAT. It is impossible for the state to profit from voluntary activities, says Rune Aale-Hansen, CEO. in accounting in Norway.
In sports, VAT varies between 25%, 12% and 0%.
VAT rules are complex and perceived as unreasonable for grassroots sports. Mainly because they are voluntary and not commercial. Accounting Norway believes that there is great potential for simplification and encourages the Minister of Culture to enter into a close dialogue with the Minister of Finance to simplify VAT rules for grassroots sports. For access to football matches and other sporting events, 12% VAT will normally be charged on your entry ticket. Registration is required sports team, i.e. when the turnover of admission tickets exceeded NOK 3 million in a 12-month period.
- Basically the quota cap is set high to protect the voluntary part of the sport. Smaller sports teams rarely reach this limit and therefore should not be registered for the sale of admission tickets. Nevertheless, the obligation to register may arise on the basis of other taxable turnover, such as sales of advertising in the field, says Rune Aale-Hansen
- There is a registration limit of NOK 140 for the sale of advertisements; provided the sports team is recognized as a charitable or non-profit organization. In this case, 000% VAT should be calculated. from advertising turnover, but not from admission tickets, as long as this turnover separately does not exceed NOK 25 million. In other words, it's not easy.
Strange exceptions to the main rule
– VAT regulations are not only complicated, but they have too strange exceptions. For the top two leagues in men's football and the top league in men's ice hockey, there is no registration limit of NOK 3 million; here we return to the general registration limits of 50 and 000 crowns for charities and non-profit organizations. The same does not apply to women, says Norway's accounting director:
- The sports team must therefore care about what sport is practiced. Also about which division the team is in, whether women or men play. It matters whether there is a general registration obligation. In addition, whether the sports team is charitable or non-profit organization, and there is a limit of 3 million crowns.
Selling goods is also complicated
The sale of food and drink at kiosks is usually taxed at the standard rate of 25%. The quota limit for non-profit organizations is NOK 140. For other companies, the amount limit is NOK 000.
- Sales at kiosks of voluntary organizations may, however, be exempted. Admittedly, this is not something that the sports team itself can choose. On the other hand, the sports team must keep track of whether the kiosk is open only during sports events, whether the kiosk operating is voluntary and free of charge, whether more than 80% of the turnover goes to viewers and whether there is a modest selection of goods that do not contain alcohol. If these conditions are met, the sports team will be exempt from VAT, says Aale-Hansen.
The right to deduct VAT.
- It is one thing to keep track of which goods and services you want to charge VAT, that is hard enough. Determining how much input tax deduction a sports team has is at least as complicated. Here you need to keep track of what costs are associated with a particular sales activity and whether it is taxed or not. Costs that affect the sports team as such, such as accounting, must be allocated proportionally. All based on taxation and no turnover. The most important thing here is whether the sports team has the two highest leagues in men's soccer and the highest league in men's ice hockey. In addition, whether they were relegated from the league during the year - this affects the tax liability and the right to deduct. It is also important not to mix up income that does not count as turnover in calculations such as deductions from members and scholarships.
Photo: CF-Wesenberg.
Pictured: Managing Director of Accounting Norway, Rune Aale-Hansen.
Source: Regnskap Norge
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